Plan opposed to take credit card fees out of taxes for vehicle registration

Nevada local governments and schools Wednesday protested the governor's plan to take credit card fees out of the vehicle registration taxes they now receive.

The state will have to pay an estimated $11 million over the next two years to cover fees charged when people use credit cards to pay for vehicle registrations and license renewals.

DMV Director of Administration Dennis Colling said those fees are estimated at up to $27 million by the end of fiscal 2007 and will keep increasing as more and more people use the Internet to do business with DMV. He said AB435 is a "simple bill" that would take the fee costs out of the governmental services tax money instead of having the state budget.

School and local government officials got some immediate support from Speaker Richard Perkins, D-Henderson, who said the state is saving money by taking credit card payments over the Internet or by phone.

"Are we not saving money in personnel costs by having them use online and mail-in?" he asked. "If we didn't use credit cards to provide that convenience, we'd have to increase the state staff."

Colling said that was true. One reason DMV began taking credit cards was to keep people out of DMV offices and decrease the number of new staff the department needs each year.

Ways and Means Vice Chairwoman Chris Giunchigliani, D-Las Vegas, said she doesn't like the plan because of the effect it would have on schools. The estimated cost to school districts is more than $2.6 million over the biennium.

Pat Zamora, of the Clark County School District, added the funding is outside the state's per-pupil guarantee through the Distributive School Account - which means the state wouldn't make up the loss.

Assemblyman Bob Seale, R-Las Vegas, said the state gets another advantage: credit card payments get around the problem of bad checks, which cost DMV a surprising amount of money each year.

Mary Henderson, representing North Las Vegas, and David Frazier of the Nevada League of Cities said the plan isn't fair for another reason - the state already keeps 6 percent of the governmental-services tax revenues as an administrative fee.

The committee took no action on the proposal but Fiscal Analyst Mark Stevens cautioned members they must make a decision before closing the DMV budget.